NADA's service provider data access addendum now available

February 28, 2014

By Mark Scarpelli, Chicago Metro NADA Director

The NADA’s Legal and Regulatory Affairs department in January issued a sample Service Provider Dealer Data Access Addendum and cover memo for dealers to use with their third-party service provider vendors.

This follows a memo sent last August to all NADA members that contained an overview of the primary regulatory issues surrounding dealer data, numerous practical tips for dealers to consider when protecting their data, as well as samples of the contract provisions required under federal law when a dealer wishes to allow access to dealer data with a third party service provider.

The Addendum is available to dealers as a Word document at www.nada.org/dealerdata.

In other NADA news …

• Although new-car dealers continue to face a host of challenges from the government and industry, 2014 NADA Chairman Forrest McConnell said dealers are risk-takers and they can rely on the NADA just as he and his family have done for generations.

"The NADA is working through some of the toughest regulatory and legislative challenges that Washington throws at us," McConnell said in keynote remarks at the NADA Convention & Expo in New Orleans on Jan. 27. "Many of you know that the government has been trying to impose more regulations over our $783 billion finance market. Why? Because they don’t understand our business.

"Eighty percent of customers come to us because our financing system is convenient and competitive. We provide credit avenues that they didn’t even know existed. The NADA will keep hammering Washington that dealers don’t add to customers’ credit costs. We save our customer’s money. Period."

• Despite an auto sales turnaround over the past year, new-car dealers still face major industry and regulatory challenges, said David Westcott, 2013 NADA chairman.

"Last year, we faced a new threat to dealer-assisted financing and our business model," Westcott said in remarks at the 2014 NADA Convention & Expo in New Orleans on Jan. 25. "In-dealership financing has been enormously successful in increasing access to auto credit, and reducing the cost for millions of Americans. Consumers overwhelmingly choose dealer-assisted financing because it’s convenient and affordable."

• A U.S. Senate committee on Feb. 6 approved a bipartisan, NADA-supported bill that eliminates some red tape required by the Environmental Protection Agency when a new car or truck is sold.

The legislation, which passed the Senate Environment and Public Works Committee, now goes to the floor of the Senate for consideration. House Resolution 724, which has no known opposition, was passed unanimously by the House of Representatives in January. The bill would repeal a 1977 mandate that requires dealers to certify that a vehicle complies with the Clean Air Act.

A dealer is required to present this form to the purchaser of a new vehicle even though all vehicles must comply with the Clean Air Act before being sold in the United States. Additionally, a Clean Air Act certification sticker can be found under the hood of most vehicles, or in the owner’s manual, making an additional certification by the dealer redundant.

• Increasing home values, residential housing construction and rising employment are key factors that will drive the U.S. economy this year, said Steven Szakaly, NADA chief economist. "These factors are also critical to maintaining the pace of auto sales growth, which has been an integral part of the economic recovery," Szakaly said.

The NADA predicts 16.4 million new cars and light trucks will be purchased or leased in the U.S. this year, a 5.8 percent increase over 2013.

• A sharp rise in the supply of late-model used cars and light trucks is expected to end a five-year run of price growth, according to the NADA Used-Car Guide.

Late-model used-vehicle supply will be more plentiful, in large part due to an 18 percent surge in off-lease volume. The supply of units aged 6 to 8 years, though, will continue to fall as a byproduct of the new-vehicle sales decline from 2006 to 2009.

"These diverging trends will result in late-model used-vehicle prices dropping more substantially than their older counterparts," said Jonathan Banks, executive automotive analyst for the NADA Used-Car Guide.

• After a slight 0.1 percent uptick in January, the NADA’s used-vehicle price index remained unchanged at 124.6, tied with August 2013 and December 2013 as the third-highest figure ever recorded. The index measures the change in used-vehicle prices up to eight-years-old.

"The arctic weather that impacted large swaths of the country did little to push used-vehicle prices off their expected course in January," said Jonathan Banks, executive automotive analyst of NADA Used-Car Guide, a monthly report on new- and used-vehicle sales trends and price movement.

Price movement for the majority of vehicle segments fell between a tight range of -0.3 percent to 0.4 percent, with compact utility, large SUV and mid-size van prices dropping slightly, while compact car, large pickup and mid-size utility prices inched up; and mid-size car prices were flat over the month.